Draft Plan of action: Strongest Choice now the Smartest Treasurer Tim Nicholls today released the Government’s Draft Plan of action to reduce the $80 billion state debt and $4 billion interest bill - the ‘Strongest and Smartest Choice’ for Queensland. “Our Draft Plan is the strongest choice because we have always been committed to fixing the state’s finances and ridding Queenslanders of the burden of $450,000 an hour interest repayments, even if there were no easy ways to do so,” Mr Nicholls said. “It is the smartest choice, because to achieve that goal we are proposing a program of asset transactions, including sales, long-term leases and an innovative proposal for private sector participation, rather than increasing taxes or reducing services that Queenslanders rely on. “At their current value, the asset transactions proposed to reduce debt could potentially deliver proceeds of $33.6 billion, enough to return state debt to more sustainable levels and invest in vital infrastructure needed for a growing Queensland.” The assets under consideration and the proposed transaction methods are: • Private sector investment: Electricity networks (Powerlink, Energex, Ergon Energy – excluding retail business) • Long-term lease: Integrated Port of Townsville and Mt Isa Rail Line; Port of Gladstone • Sale: Ergon Energy retail business; SunWater industrial pipelines business; electricity generation businesses (Stanwell Corporation, CS Energy); and other non-core business functions such as a coal mine. Mr Nicholls said the Government’s innovative private sector investment proposal will allow Government to retain 100% ownership of ordinary shares in the three electricity network businesses, but invite private sector participation via a hybrid instrument. This would involve the private sector funding infrastructure investment in exchange for a share in the revenue streams of these entities. The Government would also retain a share of revenue. None of the proposed transactions would take place until the Government has secured a mandate for them at the next state election. Mr Nicholls said the Government had considered the spending and saving priorities voiced by everyday Queenslanders, as well as the advice of economic experts like the Independent Queensland Commission of Audit, as it formulated a methodical plan to reduce the $80 billion state debt. “The recent Federal Budget also had an impact, making two of the choices available to the State Government – to significantly increase tax or reduce services – less palatable,” he said. “More than 70,000 Queenslanders gave their own feedback on the debt challenge through the Strong Choices campaign, with more than 55,000 submitting their own People’s Budgets. “The main message from Queenslanders was clear: they supported strong action to reduce the debt as a priority. “We know everyday Queenslanders are already dealing with cost of living pressures and we will not burden them with a ‘double whammy’ of tax increases on top of tax increases, or reduce services that have already been made more efficient. “Not everyone will agree with all the choices we make about how to pay for things in the future. “But Queenslanders will know we have funding certainty, so we can invest in the things we need for a growing and ageing population, like hospitals, schools and roads.” The Draft Plan of action outlines how three-quarters of the expected proceeds from the proposed asset transactions - $25 billion – will be used to pay down the State debt to $55 billion, a level recommended as sustainable by the Independent Queensland Commission of Audit. “The new debt level would mean Queensland’s annual interest bill would drop from $4 billion to $2.7 billion,” Mr Nicholls said. “We propose to then deposit the remaining quarter of the proceeds – about $8.6 billion – in the new Strong Choices Investment Program, a suite of new infrastructure and investment funds designed to build more schools, hospitals, roads and other vital infrastructure during the next six years.” Mr Nicholls said the Strong Choices Investment Program would include: • Rural and Regional Roads Fund, $1.5 billion • South East Queensland Roads Fund, $1.5 billion • Public Transport Rail Infrastructure Fund, $1 billion • Bus and Train Project, $1 billion • Future Schools Fund, $1 billion • Rural and Regional Economic Development Fund, $700 million • Local Government Co-Investment Fund, $500 million • Future Fund (Natural Disasters), $500 million • Entrepreneurial and Innovation Fund, $500 million • Community Hospitals Fund, $300 million • Cultural Infrastructure Fund, $100 million. “I encourage all Queenslanders to read the Draft Plan of Action and to nominate projects in their towns or regions that could benefit from one of the investment funds outlined within the Strong Choices Investment Program.” The Draft Plan for Action can be read online or downloaded at StrongChoices.qld.gov.au.
Posted on: Tue, 03 Jun 2014 04:58:29 +0000
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